A home loan helps finance the price of the home and thus, assist a homebuyer to fulfill the long-cherished dream of having a home. But what about the down payment – you need to come with a down payment amount when you buy a home through a home loan program. The amount can vary from a loan a program to another one, but the higher down payment you can come with, the better it would be for you.
Well, not to worry. A down payment assistance program is there to help you. It can help you to get the required cash and thus, lowers your worries. But you have several questions that you want to be resolved before opting for the down payment assistance to purchase homes in Texas. Here are the questions and the answers –
How does this program work?
Administered by a local or state housing authority, directly through your lender or a nonprofit organization, down payment assistance programs offer a set amount of money to qualified homebuyers. Being a homebuyer, you can use the money to cover their down payment or closing costs. The money that you receive through this program can be a grant, an interest-free loan or a debt you pay off in the future. Generally, you’ll have to agree to live in the home and use it as your principal residence for a certain period of time to avoid having to repay the money. If your down payment assistance program is treated as a loan, it would have to be paid in full in case you sold the property or finished making all of your mortgage payments.
Who can get down payment assistance?
Not every home buyer can qualify for a down payment assistance program. It is because each state has its own rules for determining eligibility. Typically, it depends on the income of the homebuyer and how much home he or she is buying. Many of these programs are limited to first-time buyers. However, that does not mean it is only for first-time buyers. If you’ve owned a home previously, you might not qualify for this loan program. But there are exceptions too. In some cases, homebuyers also need to attend special training programs where they would learn about the loan process and the financial tasks that go along with owning a home.
How much funding is available?
When it comes to the amount of money that you can receive through a down payment assistance program, you need to delve deep into that matter. It is because there is no hard and fast rule regarding this. The amount of money you can get through a down payment assistance program depends on the state that is administrating the funds. Some of the states decide this based on the sales value of the home while others offer a flat amount. So, you should check the guideline of your state regarding down payment assistance programs to get the right answer to this question.
These are some of the general but crucial that a homebuyer wants to get answers before applying for a down payment assistance program. As you get the answers, without waiting any more, apply for the program and go a step closer to fulfill your dream of homeownership.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.